Fund: 1863 Ventures
First close of $2.5 million, aiming to raise $10-$20 million
What it is: An impact-oriented venture capital fund investing in New Majority entrepreneurs. The fund is attached to a business development program committed to accelerating New Majority entrepreneurs from high potential to high growth. 1863 Ventures and its affiliated program have supported 559 founders; about 90% of them are Black. “Our goal is to create $100B of new wealth by and for New Majority entrepreneurs in 10 years.”
Invests in companies that demonstrate traction and market validation and are led by founders committed to scale their companies.
Minimum investment size: $500,000
Investment style: Last year, it invested $850,000 in a model portfolio of seven businesses in the form of non-dilutive grants. The companies went on to raise $2.95 million from other capital sources, according to 1863 Ventures, enabling the raise of a more traditional VC fund. Going forward, the fund will make revenue-based loans with rates around 7-10% for the life of the 3-5 year loan. Repayments are tied to cash flow. The fund hopes to deliver a 10-12% annual return to LPs.
Leadership: Founded by Melissa Bradley, an Obama and Clinton appointee, Georgetown University professor of practice, and founder of Sidecar Social Finance, an impact investing advisory practice
Quote: She appreciates the good intention of VCs setting up new funds specifically for Black founders, but has some doubts. “If people really want to invest in us,” says Bradley, “they would have picked up the phone and invested in one of us. We don’t need another PR stunt.”
Seth Levine I’m observing that IRR is a metric that is becoming an increasing focus in venture, replacing fund return...